Retirement Plans - SEP IRA Taxation

Employer’s contributions to a SEP IRA are immediately tax-deductible by the employer. Contributions are not taxed at the employee’s rate until the employee withdraws the funds. Employees may begin to withdraw money from the plan at age 59.5. All withdrawals are taxed as ordinary income and withdrawals prior to age 59.5 are subject to a 10% penalty tax.



IRA Contributions, Accounts And Investments


Related Articles
  1. Retirement

    SEP IRA Limits in 2016

    Discover the SEP IRA limits for 2016. Included is a summary, plans that would be ideal candidates for SEP IRAs, and contribution and distribution rules.
  2. Retirement

    How Much Are Taxes On An IRA Withdrawal?

    Taxes on an IRA withdrawal depend on the type of IRA, your age, and the purpose of the withdrawal.
  3. Retirement

    Analyzing The Best Retirement Plans And Investment Options: Individual Retirement Accounts (IRAs)

    What they are: An individual savings account with tax incentives. Pros: Tax benefits - investments grow tax-deferred and contributions may be deductible; variety of investment options ...
  4. Retirement

    SEP IRAs: Conclusion

    By Denise Appleby Simplified Employee Pension (SEP) IRA is an IRA-based employer-sponsored retirement plan. A business owner who adopts a SEP for his or her business will be solely responsible ...
  5. Retirement

    SEP IRAs: Eligibility Requirements

    By Denise ApplebyWho May Establish an SEP?Any employer - including a sole proprietorship, partnership, corporation, and nonprofit organization - with one or more employees may establish an SEP ...
  6. Financial Advisors

    Tapping Your Retirement Accounts: How to Start

    Deciding which retirement account to tap first can be confusing as it may impact how long your savings last. Here's some help.
  7. IRAs and Roth IRAs

    What IRAs are: Tax-advantaged savings accounts for individuals. Pros: Tax benefits; investments grow tax-deferred and contributions may be deductible; numerous investment choices with range of ...
  8. Mutual Funds & ETFs

    Is a Vanguard SEP IRA Account Right for You?

    Learn about the SEP IRA offered by Vanguard and why it is one of the best SEP products available, including why it's a good fit for small business owners.
  9. Taxes

    How to Use Your Roth IRA as an Emergency Fund

    Do you feel like you don’t have enough money to save for emergencies and also save for retirement? An often-overlooked feature of the Roth IRA could solve your problem.
  10. Credit & Loans

    Should I Use My IRA to Pay Off My Credit Cards?

    Cashing in an IRA to deal with outstanding credit card balances may not be the best way, but sometimes it's the best available way. Here's how.
RELATED TERMS
  1. Simplified Employee Pension - SEP ...

    A retirement plan that an employer or self-employed individuals ...
  2. Withdrawal Credits, Pension Plan

    The rights of an employee who has a qualified pension plan to ...
  3. Hardship Withdrawal

    An emergency withdrawal from a retirement plan that may be subject ...
  4. Savings Incentive Match Plan For ...

    A retirement plan that may be established by employers, including ...
  5. Tax-Sheltered Annuity

    A type of annuity that allows an employee to make contributions ...
  6. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
RELATED FAQS
  1. Is a Simplified Employee Pension (SEP) IRA tax deductible?

    Learn everything you need to know about your SEP IRA, including the benefits to employers and whether or not a SEP IRA is ... Read Answer >>
  2. What is the difference between a ROTH, SEP and Traditional IRA?

    The Roth IRA was established in 1996 as the newest addition to the individual retirement accounts (IRAs) available to individuals. ... Read Answer >>
  3. Can you make tax-free withdrawals from your 401(k)?

    Find out whether you can take withdrawals from your 401(k) tax-free, including how withdrawals from Roth and traditional ... Read Answer >>
  4. Can I use my IRA savings to start my own savings?

    Find out whether you can withdraw funds from your IRA to start a savings account, and why this is not the wisest use of your ... Read Answer >>
  5. When are Simplified Employee Pension (SEP) IRA contributions due?

    Read this article to learn more about the April 15 SEP IRA contribution deadline date and how tax-filing extensions affect ... Read Answer >>
  6. When can I withdraw my IRA money?

    Managing an individual retirement account can be tricky. Find out when you can withdraw IRA money without incurring a 10 ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center